Credit card providers prep for Christmas by enticing new customers with the promise of bonus rewards points. Discover how you can take advantage of $1,350 worth of travel rewards here!
Customers looking to snag a new credit card before Christmas can look forward to bonus rewards as providers bolster the perks to entice new cardholders. Read on to discover how you can make the most of your new credit card this silly season.
What can I be rewarded with?
Credit cards providers frequently resort to bonus points and rewards tactics to attract new customers. This strategy has proven particularly popular in the lead up to Christmas, with a number of providers ramping up their rewards offers for new cardholders. An analysis of the creditcardfinder.com.au database of almost 400 credit cards found that cardholders could rake in an estimated $1,350 worth of free flights (in other words, a return trip from Sydney to Los Angeles) when they spend $1,000 within the first three months.
Which card offers the *best value?
The study compared the equivalent dollar value of credit cards with Qantas and Velocity bonus points to discover which offers the most competitive rewards based on the average cost of flights. On sign-up, 29 cards offered between 2,000 and 100,000 bonus frequent flyer points, with annual fees ranging from $0 to $749.
A points to dollar value ratio stand-out was the American Express Platinum Card, offering cardholders 80,000 bonus points estimated to be worth $1,700. However, cardholders must be prepared to spend $1,500 on the card within the first three months if they want to take advantage of the bonus points.
If you’re a Qantas Frequent Flyer, the ANZ Frequent Flyer Black card boasts high value in this category. This card offers 75,000 Qantas points, estimated to be worth $1,725, and with an annual fee of $425, it returns a potential profit of $1,300. However, customers are required to spend a whopping $7,500 on their card within the first three months to earn these bonus points.
Bankwest is the latest cab off the rank to launch a bonus points offer, with 50,000 points on sign up for its Qantas Platinum MasterCard for an annual fee of $160. This can earn cardholders a net profit of $990 in flights, but they have to spend $2,500 in the first three months to qualify for the points.
Compare credit card rewards offers
|Credit card||Airline||Bonus points||Value of bonus points||Annual fee||Net value of bonus points||Required spend in the first 3 months|
|ANZ Frequent Flyer Black||Qantas Frequent Flyer||75,000||$1,725||$425||$1,300||$7,500|
|ANZ Frequent Flyer Platinum||Qantas Frequent Flyer||50,000||$1,150||$0 in the first year, then $295||$1,150||$5,000|
|ANZ Frequent Flyer Platinum American Express/Visa||Qantas Frequent Flyer||50,000||$1,150||$0 in the firs year, then $295||$1,150||$5,000|
|Bankwest Qantas Platinum MasterCard||Qantas Frequent Flyer||50,000||$1,150||$160||$990||$2,500|
|Citi Qantas Signature Credit Card||Qantas Frequent Flyer||50,000||$1,150||$348||$802||$10,000|
|Citi Prestige Card – Qantas Rewards||Qantas Frequent Flyer||70,000||$1,610||$749||$861||One purchase|
|Jetstar Platinum Mastercard – Qantas||Qantas Frequent Flyer||40,000||$920||$69 in the first year, then $149||$851||One purchase|
|Westpac Business Choice Rewards Card – Qantas Frequent Flyer||Qantas Frequent Flyer||40,000||$920||$150||$770||One purchase|
|HSBC Platinum Qantas Credit Card||Qantas Frequent Flyer||40,000||$920||$199||$721||One purchase|
Source: creditcardfinder.com.au, ranked by highest potential net value.
Note: The information listed above are based on the product details as of September 29, 2015.
How can I compare rewards credit cards?
While many of these cards offer beneficial rewards, not all of them will be best suited to you. Consider some of the following factors while comparing offers to find the best one for you.
- Bonus points. Although all of the aforementioned credit cards offer bonus points, some promotions may compliment your spending habits better than others. Consider the earn rate and the eligible spend you’ll be required to make before accessing the points to determine whether it’s the right choice for you. If you have to spend more than usual to access the points, another offer may be of more value to you.
- Rewards program. Make sure that the rewards program is one that you’ll take full advantage of. If you regularly fly with Qantas, a card connected to the Qantas Frequent Flyer program might be of interest. On the other hand, if you’re a loyal Virgin customer, consider a card that is partnered with the Velocity Frequent Flyer program.
- Limitations. Rewards credit cards usually restrict how and where cardholders can earn and redeem their points. Make sure the terms and conditions associated with your card are compatible with your regular spending habits. Points caps and expiration can also limit how you use your points, so this is another factor you’ll need to be mindful of.
- Costs. Most rewards credit cards come at a cost. If the monetary value of your rewards doesn’t outweigh the fees associated with the card then you might want to look at another offer.
What do I need to be wary of?
The holiday season often sees increased credit card activity, creditcardfinder.com.au saw a 25% increase in credit card spending in December last year compared to November, as cardholders made a record $217.3 billion worth of credit card transactions for the month ($43.7 billion more than November).
While these offers can be a great way to get more out of your credit card, be mindful of the annual fee and the eligible spend required to access the bonus points. Don’t let these conditions lure you into the trap of overspending, as you’ll have to repay every cent charged on the card (plus interest) in the long run.
creditcardfinder.com.au money expert Michelle Hutchinson recommends that to take advantage of these offers, you’ll need to spend responsibly and repay your balance in full each month. “A free holiday sounds amazing, but it won’t be if you’re paying for it in extra interest. Save that for your spending money on holiday, instead,” says Michelle.
So while the eligible purchases you’ll need to make to access your bonus rewards points could more than cover your Christmas gift list, remember that you’ll have to repay every purchase in full. If not, the interest you will incur could more than counteract the savings you’ll make on flights costs thanks to your rewards points.
Compare your options in conjunction with your financial situation and ability to repay to find the most suitable credit card for you this Christmas.